Authored by Jakop Mphofu and Luyanda Hlongwane.
In April 2026 the high court held that an arbitration clause in a standard-form building contract was binding on the parties even though the formal contract documents were never signed. Consensus and conduct were sufficient to establish a binding arbitration agreement.
The dispute arose from a building project in which a property owner appointed a contractor through a formal tender process on the terms of the JBCC Principal Building Agreement (Edition 6.2). Both parties performed under the contract for over 18 months, but the formal contract documents were never signed. When a dispute arose and the contractor referred it to arbitration, the owner contended that no binding arbitration agreement existed in the absence of signed documents.
The court found that this argument could not stand. It was common cause that the contractor tendered on the terms of the JBCC, that the owner accepted that tender in writing, and that both parties conducted themselves in accordance with the JBCC for over 18 months. The Arbitration Act requires a written arbitration agreement but does not require that it be signed, it is sufficient if the parties have adopted and acted on the written agreement. The letter of intent required the documentation to be finalised "for signing", but on its plain wording this was not a condition that had to be fulfilled before the contract on the agreed terms could commence.
The court rejected the owner's reliance on clause 5.2 of the JBCC, which requires parties to sign "the original agreement". It found no provision in the JBCC that makes signature by both parties a precondition to an enforceable contract; clause 3.3 provides that the agreement comes into force on the date of acceptance by the employer.
The court declared the arbitration clause binding and ordered appointment of an arbitrator by the Association of Arbitrators of Southern Africa. The owner was ordered to pay costs on the party and party scale, including the costs of one senior counsel.
Save where the law requires a signed written agreement, parties who accept terms and perform under a contract will not under these circumstances avoid the consequences of the agreement including its arbitration clause simply because the formal documents were never signed. Where the written terms have been accepted and acted upon, the arbitration clause that is part of the agreement is binding.